Market veteran and Director IIFL Finance, Sanjiv Bhasin, in a recent conversation, shared his views with CNBCTV18 on market along with his sectoral outlook going ahead. He discussed how the Indian markets are going to respond to the upcoming data from the US and the global markets, along with why he is so bullish on the Indian story going ahead.
The market has been taking a breather now after Infosys and TCS numbers how do you feel about the market?
The first 15 days of April have made up for all the pessimism of February and March. I think we are headed for a superb close in April. Nifty might hit new highs in May 2023.
Hence, at 16,800 we were grossly oversold, whereas 17,500 is the equilibrium. Once we get past 18,500 we will talk about the bull market. I think, on all parameters, India stands out.
The little off-colour of TCS and Infosys have been made up by DLF and Godrej Properties. So, I am sticking my neck out, next week is going to be superb and on May 15 you will see new highs with Bank Nifty leading the charge.
With Nifty and Bank Nifty 5-6% away from all-time highs, which stocks and sectors should be focused on?
The index has flattened out due to the pressure of Infosys and TCS along with some of the mutual funds balancing their books. Still, the mid-caps have been star performers. DLF has hit new highs, Godrej Properties is up 40 percent. Similar is the case with some of the PSU Banks like Bank of Baroda.
The dollar will go below 100 and hit 98. Hence, metals are going to play a crucial role. A rate cut by June-July 2023 is very much on the cards.
Secondly, inflation and no rate hike by RBI puts India in a sweet spot. Earnings are going to be the barometer. However, it is the retail flows which are the backbone of this market and not the foreign institutions. Metals, cement, banks, real estate, and the broader market is going to outperform. Once 18,150 is crossed, we will look ahead for new highs by the middle of May 2023.
Will you buy IT stocks now after the recent correction?
We bought select IT stocks, namely, HCL Tech, Tech Mahindra, and Persistent Systems. They have given reasonable returns recently. We are overweight on metals; looking at stocks like Grasim, Hindalco, Tata steel etc. L&T has greater visibility as a stock. Smart money will shift from IT to cyclical sectors. Also, the weakness in the rupee was overdone. That is why the IT sector might remain stagnant for a while, and therefore, I will not buy Infosys as yet. Though, HCL Tech, Tech Mahindra and Persistent Systems are stocks where you can do a SIP in.
What about autos, CLSA has stated that the demand is resilient, so are you buying any auto stocks?
Bosch and Tata Motors are two of my top picks along with DLF and Godrej properties. I believe, Tata Motors will be a surprise on the upside. Bosch is already hitting new highs, thus, I will not sell this stock even at Rs 24,000. That’s the type of bullishness.
People have missed the woods for the trees. France, Germany, and UK markets are all hitting new highs. Also, a major chunk of the business of Tata Motors and Bosch is coming from these countries. If you can take a slight risk, Motherson can give you a very good opportunity as an OEM because Europe is rebounding.
Autos are starting off. Even though, in India, we see some plateauing, Maruti can take the cake on passenger vehicles. Tata Motors and Maruti are going to be my top performers in the auto sector.
Which are the mid-caps and small-cap picks you are bullish on?
In October 2022, I was bullish on Anupam Rasayan. The stock is up 45% despite the market going nowhere. My next pick will be SW Solar, 40 percent of which is owned by Reliance Energy. It has got 18 crore equity and an order book of Rs 800 cores last year while they are staring at two big orders by the end of April. SW Solar may also double by Diwali from its current price of Rs 300.
In large caps, I am bullish on Grasim, AB Capital, Tata Steel, Hindalco, JSW Steel among others. I am overweight on the metals and they can surprise you on the upside.
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